Federal Treasurer Joe Hockey has accused the Manufacturing Workers Union of being at ''war'' with Toyota and threatening the viability of Australia's last car maker by blocking attempts to cut high costs.

But the federal opposition and the union movement pushed back, arguing the federal government was trying to shift blame for Holden's decision to stop making cars from 2017 and make workers the scapegoat for the decision.

Treasurer Joe Hockey says the Australian Manufacturing Workers Union is at war with Toyota, as the Victorian government fights to keep the car manufacturer in Australia. Photo: Alex Ellinghausen

In a blunt warning to employees across the country, Mr Hockey on Friday said employers' costs must fall to protect the Australian economy in what was a volatile global market.

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He backed cabinet colleague Industry Minister Ian Macfarlane, who in an exclusive interview with Fairfax Media pleaded with Toyota's 2500 manufacturing workers to "think about their futures" and accept pay cuts and the removal of "archaic" conditions in their enterprise bargaining agreements.

Mr Hockey said Australians had to start living within their means and said the country could no longer rely on China to be the "sole champion of Australian growth".

"The union, the AMWU, is at war with Toyota, they are creating the conditions that make it extraordinarily difficult for Toyota to continue producing cars in Australia,'' he told ABC radio.

Mr Hockey said wages negotiations were a matter for individual employers and their employees, "but the fact is we are all going have to do what we can to make Australia more competitive. Obviously we have to do more to reduce our cost base".

Mr Hockey's comments came as the Victorian government called on their federal Liberal counterparts to make a "significant contribution" to Toyota to ensure the car maker builds the next generation Camry in Australia, and amid debate in the federal government over industry assistance.

The Victorian government presented its secret plan to save Toyota's local manufacturing operations at a crucial meeting with federal Industry Minister Ian Macfarlane and Trade Minister Andrew Robb this week.

But opposition industry spokesman Kim Carr said the biggest obstacle to Toyota remaining in Australia was the high Australian dollar - which has recently fallen to about US88 cents - not the wage costs of workers and "archaic" conditions singled out by Mr MacFarlane.

"The union and workers are sensitive to the need for change. To blame the enterprise agreement for the destruction of car makers is wrong,'' he said.

"I have no doubt that workers appreciate the vulnerability of the automotive industry in Australia, but the loss of Holden is a much more serious problem. The government is constantly trying to find a scapegoat and an alibi for its policy failure - this is a company [Toyota] that wants to invest in Australia, like Holden."

The national secretary of the Australian Manufacturing Workers Union's vehicle division, Dave Smith, said he was "not confident Toyota would stay in Australia, and that has nothing to do with the enterprise bargaining agreement".

"The fact is the government will no longer provide funding [to car makers]. Their treatment of General Motors [Holden] has effectively destroyed the components sector. I would be really pleased for our members if Toyota does stay."

Mr Smith said the union would have no problem working with the car maker on some of the variations to pay and conditions being sought, but "some of it is nonsense".

"For example, their desire to cut shop stewards training leave, they want less than what the award provides for,'' he said.

Mr MacFarlane singled out provisions in Toyota workers's contracts that allow them four hours paid time off to give blood and sick leave without a medical certificate.

Toyota workers also receive a range of other shift loadings for first aid training, performing 'dirty' work and 'wash up' time at the end of shift. The company lost a federal court case over its attempt to scale back some of these conditions in a bid to save $17 million in wages, but it plans to appeal the ruling.

But Senator Carr said the question of being paid to take time off to donate blood was "incidental" to Toyota's future.

He called on the government to set aside new money to invest in Toyota Australia and assist the car maker in re-tooling the Altona plant to secure production of the new Camry in Australia from 2018. Toyota will make a decision later this year on where the new car will be made and the company's Australian operations are attempting to reduce the overall cost of car making by $3800 per car to secure the next generation model for the Altona plant.

"The government has to make a special allocation for it. They need to make a decision to co-invest - it's not something that could come from the Automotive Transformation Scheme [fund],'' he said.

There was about $1.38 billion through to 2016 left in the fund in October last year, but the federal government has promised to cut $500 million from that fund - a decision Senator Carr said the government should reverse.